Tokyo seeks to catch up in Africa

Updated: 2013-06-03 02:52

By Cai Hong (China Daily)

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Japan has been adopting dollar diplomacy since the Abe administration took office in late December. The country has been busy announcing development aid programs for Myanmar, India and Africa.

When the fifth Tokyo International Conference on African Development opened in Yokohama on Saturday, Japanese Prime Minister Shinzo Abe pledged that his country's aid to Africa in the five years through 2017 will total 3.2 trillion yen ($31.8 billion). Japan also will provide 650 billion yen for African infrastructure development over the next five years. At the 2008 TICAD, the Japanese government offered African countries official development assistance of about $13 billion.

It is not difficult to discern the motivations behind Japan's increased aid to Africa. First, Japan is trying to jump onto the African-growth bandwagon.

Africa is increasing its presence in the global economy. According to the Economy, Trade and Industry Ministry, sub-Saharan African countries saw an average growth of 5.8 percent in their gross domestic products during the 2000s. Its major exports are on the increase thanks to price hikes of natural resources such as crude oil and gas. The African Economic Outlook 2013, which was released last week, predicts that the continent's economy is projected to grow by 4.8 percent in 2013 and accelerate further to 5.3 percent in 2014. The International Monetary Fund is more optimistic about Africa, forecasting economic growth of 5.4 percent in 2013 and 5.7 percent in 2014 for the economies of sub-Saharan Africa on the back of rising investment and booming extractive industries.

The Abe administration is appealing to Japanese companies to invest in Africa. Now Japan is looking at the resource-rich continent as a consumer market, a source of materials and the destination of direct investment as a growth area.

Japanese trade and investment in Africa has been limited to only a few countries - especially South Africa and Liberia - that are in line with Japan's "key country approach". Japan has focused on several countries that can serve as bridges to the continent.

Political upheaval in a number of African countries seems to explain Japanese investors' lack of interest in the continent. The January hostage crisis in Algeria left 10 Japanese dead. Japan will provide 100 billion yen of aid in the following five years to restore peace and security in the Sahel, the area south of the Sahara, to support Japanese businesses there.

Second, for Japan, Africa has become a venue for fierce competition with other countries. According to the United Nations and other organizations, direct investment in Africa from overseas tripled from about $15 billion in 2002 to about $50 billion in 2012.

Japan recognizes the need to strengthen ties with Africa against the backdrop of growing interest from rivals such as China and South Korea, Japanese trade ministry official Yasunori Nakayama told AFP.